BALTIMORE (MD)
Washington Post
September 29, 2023
By Michelle Boorstein
The move blocks lawsuits allowed under a new state law that takes effect Sunday. Child sexual abuse survivors seeking damages will now have to file a claim through the bankruptcy case.
The Catholic Archdiocese of Baltimore filed for bankruptcy protection Friday, less than two days before a new state law takes effect allowing victims of child sexual abuse to sue institutions, no matter how long ago the abuse took place.
Federal bankruptcy law halts all lawsuits against an entity that files for bankruptcy. Instead, the legal action will shift to a bankruptcy court, where the process — if successful — will set a permanent end date when alleged victims of abuse related to the church can file claims, rather than opening a permanent window as the law intended.
Each diocesan bankruptcy is distinct, experts say,and outcomes depend on the court, insurance arrangements and the legal setup of the diocese. Some legal analystssaidthe move by the country’s oldest Catholic diocese could limit damages for some survivors, while other experts said it could more equitably distribute Baltimore’s assets and offer anonymity and streamlined financial awards, which some accusers may value.
But it alsomeans there will be no subpoenas or public testimony before a jury, which for some survivors is a blow to transparency and a crucial loss.
“What victims lose is the opportunity to tell their stories in court, and many have been waiting their whole lives to do this,” said Robert Jenner, a Baltimore attorney who represents some of the survivors who planned to sue.
The bankruptcy filing was “extremely premature,” and “nothing more than an effort to protect itself while denying survivors justice,” said Philip C. Federico, another attorney who represents dozens of abuse survivors who had planned to file claims under the new law.
Terry McKiernan of BishopAccountability, a nonprofit that tracks Catholic abuse cases and documents, including diocesan bankruptcies, noted: “All bankruptcies are not created equal.”
He said survivors in some places have felt “horrible” watching bishops try to restrict which church assets should be included, or seeingrequests to release documents related to abuse denied or strictly limited. In other dioceses, McKiernan said, survivors have been more satisfied in bankruptcies.
Most importantly for abuse survivors, McKiernan said, the bankruptcy process sets a deadline for creditors — including them — to file a claim.
“What if you just can’t face it yet? Or if you’re far away and don’t hear about it?” McKiernan said.
According to the bankruptcy filing, the archdiocese has assets estimated to be between $100 million and $500 million. It estimates the number of its creditors to be 1,000 to 5,000 and its liabilities to be from $500 million to $1 billion.
In a letter Friday announcing the bankruptcy, Archbishop William Lori said he hopes the process will provide support for survivors and allow the archdiocese to continue its ministries.
“We steadfastly hope and pray those who have been harmed can find some peace in the light that has been shone on the Church’s sinful past, as well as solace through the pastoral care and financial compensation that we hope will be provided under the reorganization process.”
“Chapter 11 reorganization is the best path forward to compensate equitably all victim-survivors, given the Archdiocese’s limited financial resources, which would have otherwise been exhausted on litigation,” he continued. “Staggering legal fees and large settlements or jury awards for a few victim-survivors would have depleted our financial resources, leaving the vast majority of victim-survivors without compensation, while ending ministries that families across Maryland rely on for material and spiritual support.”
The bankruptcy filing came hours after lawyers publicly announced two complaints they hadplanned to file against the archdiocese Sunday, allegations from two women who say they were raped as children and that the archdiocese looked the other way.
A coalition of lawyers filing lawsuits against the Archdiocese of Baltimore also has a client filing a lawsuit against the Archdiocese of Washington for abuse that allegedly occurred in Montgomery County. That complaint would not be impacted by Friday’s bankruptcy filing.
Maryland includes three Catholic dioceses: Baltimore,the Archdiocese of Washington, which includes the populous D.C. suburbs, and the Diocese of Wilmington. Wilmington, however, went through a Chapter 11 bankruptcy starting in 2009 and therefore can’t be sued for any alleged abuse before that year.
On Friday, Cardinal Wilton Gregory, archbishop in Washington, issued a statement saying he expects his archdiocese will see claims with the new law.
“Of course, I cannot speculate on how many cases may be filed. What I can and must do is express again how profoundly sorry I am for past acts of abuse that occurred within our cherished Church,” Gregory wrote.
Victims’ attorneys have been advertising since the new law passed in April. Several based in Maryland said hundreds of people have come forward so far, including accusers of institutions from private and public schools to religious groups and youth organizations.
It wasn’t immediately clear Friday what impact filing under Chapter 11 of the bankruptcy code will mean for the archdiocese’s 153 parishes and dozens of ministries, including within the city of Baltimore. Chapter 11 allows organizations and businesses to reorganize and address creditors while keeping their core functions going.Share this articleNo subscription required to readShare
In an FAQ published Friday on its website, the archdiocese said its parishes, schools and Catholic Charities are separate legal entities from the archdiocese and that their assets can’t be used to pay creditors. It said it will continue to pay retiree benefits and pensions.
“The ministries and operations of parishes, schools, and other entities, such as our Catholic Charities agencies, should not be directly affected by the Archdiocese’s Chapter 11 proceeding,” the FAQ said.
Who, specifically, pays damagescan become complicated and depends on what insurers decide. A few weeks ago, Buffalo area taxpayers paid the bulk of a $10 million settlement stemming from five abuse lawsuits filed under a law similar to Maryland’s.
Baltimore is the 36th U.S. Catholic diocese or religious order to file for such protection since the Catholic clergy sex abuse crisis exploded into public view in the early 2000s. Baltimore will be the sixth diocese to file in 2023.
The filingfollows years of legal and political wrangling between state officials and the archdiocese over what legal recourse accusers have.
For two decades, lawmakers had filed measures to end or limit the statute of limitations for abuse victims to sue, but were beaten back by opponents including lawyers for the Catholic Church. The Maryland General Assembly passed the bill in April, the same day state Attorney General Anthony G. Brown released a thick report about sexual abuse and “physical torture” by more than 150 clergy members in the archdiocese from the mid-1940s to 2002.
The report alleged that more than 600 children were abused in that time frame.
The Child Victims Act removes any statute of limitations for child sexual abuse victims to seek civil damages from institutions that harbored their abusers. Dozens of other states, recognizing the lifelong trauma sexual abuse survivors face, have also removed such restrictions — but for a limited window of time. Maryland’s law is unusual in that has no time limit and caps damages. Abuse victims suing public institutions can receive a maximum of $890,000, and those suing private institutions or individuals can receive a maximum of $1.5 million.
It wasn’t immediately clear Friday what other potential creditors, besides abuse survivors, the archdiocese has.
On Sept. 5, Lori released a public statement saying the new law “has the potential to have devastating financial consequences” for the archdiocese as well as many other institutions and organizations including public school systems. In the statement. Lori said he was considering bankruptcy, and in the weeks since, he has held meetings with various groups of clergy, staff and laypeople to discuss it.
“The underlying issue that has led us to this place is indeed horrific. Innocent children were harmed, and lives were ruined,” Lori wrote in his statement.
According to the Associated Press, the Baltimore archdiocese has paid more than $13.2 million to 301 abuse victims since the 1980s, including $6.8 million toward 105 voluntary settlements.
The Maryland Catholic Conference — the lobbying arm for the three dioceses in the state — testified along with tort reform advocates in February to say they believe the Child Victims Act is unconstitutional. That’s because the legislature in 2017 raised the age people abused as children could sue from 25 to 38. That 2017 bill tucked in a provision that essentially made the change to 38 — and no older — permanent. For the legislature in 2023 to now lift all age limits, the Church and some others argue, is unconstitutional.
Brown has said he believes the law is constitutional and that he is prepared to defend it to the Maryland Supreme Court.
In the Friday FAQ, the archdiocese said that the dispute about the law’s constitutionality will probably take a long time and that it believes Chapter 11 “now provides the best avenue to equitable compensation for victim-survivors and continued ministry.”
Marie Reilly, a law professor at Pennsylvania State who researches Catholic dioceses that file for bankruptcy, said there is no clear answer to whether victims would be better served under a bankruptcy or by a civil suit.
“This will be fantastic for creditors who hadn’t started [the process of preparing a suit] or don’t have the strongest claims, and it’ll stink for someone who was days away from their jury trial. Just because of the nature of bankruptcy, it will be good for some creditors and maybe not for others,” she said.
In the Catholic Review interview, Lori said the archdiocese is at a spiritual crossroads: “This is a moment when we will experience in a way we’ve never experienced before the death and resurrection of Jesus Christ – a dying and a rising.”
Erin Cox contributed to this report.